- Pressemitteilung BoxID 130078
Ypsomed invests in market development and launches new diabetes brand
- In the first six months of the 2009/10 business year, Ypsomed generated consolidated sales of CHF 126.8 million and an operating profit of CHF 6.8 million. In the short-term the operating profit margin at EBIT level fell as previously announced to 5.4% due to high costs for the production ramp-up and the market launch of Pura(TM) .
- Sales in the diabetes direct business increased by 5.4%, but did not fully compensate lower production volumes for Sanofi-Aventis.
- In the first six months of the 2009/10 business year, Ypsomed invested CHF 18.4 million in fixed assets and CHF 15.6 million in product developments.
- The successful capital increase increased the equity ratio to 82.2% and majority shareholder Dr. h.c. Willy Michel augmented his participation to 73.1%
Sales of CHF 126.8 million in the first half of the business year
In the first six months of the 2009/10 business year, Ypsomed generated consolidated sales of CHF 126.8 million compared to CHF 139.5 million in the same period in the previous year. Although Ypsomed was able to achieve an increase in sales in the diabetes direct business of 5.4% from CHF 32.4 million to CHF 34.2 million, there was an overall fall in sales primarily due to significantly lower volumes of Ypsomed pens for Sanofi-Aventis. In addition, the weak euro and US dollar had a negative effect of CHF 2.9 million on Ypsomed's pen needle and diabetes direct business sales. The start of production for components for the Sanofi-Aventis SoloStar® pen will have a positive impact on sales in the delivery devices business in the second half of the business year. An increase in the diabetes direct business can be expected as soon as the Pura(TM) blood glucose monitoring system has been introduced onto the market leading to increased sales of test strips.
Production ramp-up for pens and pen needles and launch of Pura(TM) have short-term impact on profitability
As previously announced, the costs for setting up production of the new pen systems, pen needles and safety pen needles as well as the costs for the market launch of the new Pura(TM) blood glucose monitoring system together lead to a short-term negative impact on profitability. Manufacturing costs, which also include the costs for the new blood glucose monitoring systems, amounted to CHF 91.2 million and were only 4% below those for the same period in the previous year. As a result, gross profit fell from CHF 44.4 million to CHF 35.6 million and the gross margin from 31.8% to 28.1%. The increased licensing revenues of CHF 0.4 million and net expenditures on research and development, which was at the previous year's level, are positive. Due to the launch of Pura(TM) and the new diabetes brand mylife(TM) , expenditures for marketing and sales increased. The full-time positions growth from 1'158 to 1'197 (+39) was mostly driven by the expansion of the European sales force. As a result, an operating profit of CHF 6.8 million was achieved in the first six months of the 2009/10 business year. The operating profit margin at EBIT level fell as previously announced from 11.8% in the same period of the previous year to 5.4%. Consolidated net profit amounted to CHF 6.6 million, or 5.2% in the first six months of the current business year, compared with CHF 13.6 million and 9.8% in the previous period.
Value increase on 10% participation in Bionime Corp and cooperation intensified
In the first six months of the 2009/10 business year, the 10% participation in Bionime Corp. in Taiwan increased in value by CHF 1.3 million due to the prelisting of Bionime. It was accounted for in accordance with IFRS guidelines directly in the equity position, not affecting net income. CEO Richard is extremely pleased about the positive development: "The cooperation with Bionime has been intensified in recent months, both in terms of the market launch of Pura(TM) in Europe and in the marketing of Ypsomed pen needles by existing Bionime distributors." At the same time, intensive negotiations were under way concerning an increase in Ypsomed's holding in Bionime, but for the time being this did not lead to a mutually satisfying result.
Significant investments in fixed assets and product development anew
In the first semester of the 2009/10 business year, Ypsomed invested CHF 18.4 million in fixed assets, in particular in new production plant, automatic assembly machines and tools for pen systems and pen needles. Expenditures in new product development were pushed and resulted in capitalized intangible assets of CHF 5.4 million. The total investments of CHF 25.9 million, the building up of inventories - especially for the sales of Pura(TM) - of approximately CHF 2.0 million and the par value repayment of CHF 7.6 million required substantial cash resources.
Successful capital increase strengthens equity - Majority shareholder Dr. h.c. Willy Michel augments his participation
Ypsomed has, however, extremely solid financing and due to the successful capital increase and the positive half-year result, the consolidated equity rose by 21.7% from CHF 437.0 million to CHF 531.8 million in the first semester. The equity ratio increased from 69.1% to a very high 82.2%. By offsetting part of the shareholder loan in the capital increase, the outstanding loan amount provided by the majority shareholder has decreased by CHF 85.5 million to CHF 54.5 million. As of September 30, 2009, Dr. h.c. Willy Michel holds a total of 73.1% directly and indirectly via Techpharma Management AG.
Further expanding the range of products and services in the growth market of diabetes with mylife(TM)
Ypsomed is known for its decade long diabetes competence and its comprehensive diabetes service portfolio. It is the strategy of Ypsomed to strengthen the diabetes growth in the future. With mylife(TM) , Ypsomed can make use of synergies by placing Ypsomed's own products as well as those from third parties uniformly under a new global brand. With the manufacturer-independent brand mylife(TM) , Ypsomed is also an attractive partner for distributors. The company thus improves its presence in the growth market of diabetes. Ypsomed will switch the entire pen needle product range and the Pura(TM) blood glucose monitoring system to the new mylife(TM) brand, and it is planning to introduce additional mylife(TM) diabetes products, for example the Clickfine® AutoProtect(TM) safety pen needle for doctors' practices, nursing homes and hospitals in mid-2010.
Pura(TM) blood glucose monitoring system achieves high levels of acceptance among diabetologists and patients
With an expanded sales force and with intensive marketing and distribution activities, Ypsomed introduced the Pura(TM) blood glucose monitoring system in Germany in May and in France in September. The Pura(TM) blood glucose monitoring system, which is manufactured by our Taiwanese partner Bionime, has achieved high levels of acceptance both in specialist circles and among patients. It has also generated positive feedback with regard to its design and ease of use as well as the clarity of the menu instructions and the large display. The fact that the test strip is extremely easy to grip and that there is no direct blood contact with the fingers during measurement and subsequent removal of the test strip is particularly appreciated. The Pura(TM) blood glucose monitoring system also stands out thanks to its measurement technology based on glucose-oxidase with an extremely high level of precision and accuracy as demonstrated in an ISO study. Pura(TM) is now listed in Germany with all wholesalers and mail-order companies. A large number of Pura(TM) devices have now been placed on the market with diabetologists, diabetesadvisors and patients, so there should be a clear increase in the sale of test strips in the second half of the year. Ypsomed will introduce Pura(TM) in Greece starting in December 2009, in England starting in early 2010 and in the Netherlands and the Nordic countries at the beginning of April 2010.
Further expanding business in pen needles
In the first half of the 2009/10 business year, Ypsomed further expanded its business in pen needles and signed contracts with new distributors in Canada, Egypt, Greece, Italy, Morocco and Tunisia. The ramp-up of the new pen needle production facility in Solothurn takes somewhat longer than planned, and is now anticipated for the end of 2009.
Ypsomed strengthens its position in China in partnership with Dongbao
One achievement that is particularly pleasing is the renewal of the partnership with our long-standing client Dongbao, a leading Chinese producer of insulin, for another five years. Ypsomed will in the future continue to launch new and innovative products together with Dongbao in the strongly growing Chinese market.
Ypsomed wins three important client projects for pen systems and auto-injectors while one pen project was stopped
In the Business-to-Business area, Ypsomed is able to present thirteen alternative platform systems with unique functionality for the administering of biotechnically produced liquid medications to all leading pharmaceutical and biotech companies. In total Ypsomed offers six systems for single-chamber cartridges and four systems for two-chamber cartridges as well as three disposable auto-injectors platforms. Ypsomed has recently been generating great interest with its broad range of injection systems for insulin and other medicines for the treatment of diabetes, including GLP-1, and especially with Ypsomed's newly developed ServoPen®, a functionally high-class and attractively priced reusable insulin pen. In the field of auto-injectors, one project already started with an international pharmaceutical group, and Ypsomed received the go-ahead from two other pharmaceutical companies for development and industrialization projects. However, even once a client project has been won, a product may not be launched. One pen project with a pharmaceutical company needed to be stopped due to the client's problems with the drug formulation. Ypsomed will have the full development costs refunded, but the sales for this pen system, which was scheduled for a market launch in the 2010/11 business year, will not materialize.
Production build-up for SoloStar® on plan - volumes for OptiSet® and OptiPen®Pro declining
The production build-up for components of the SoloStar® insulin pen from Sanofi-Aventis is running according to plan so that the first batches will be produced and shipped in November 2009. While the production volumes in the SoloStar® area will rise rapidly over the next few months, the production quantities for OptiSet®, OptiClik® and OptiPen®Pro continue to decline. Ypsomed anticipates that the production volumes for the insulin pens developed and produced by Ypsomed for Sanofi-Aventis will drop significantly in the short term because of stocking effects and in the medium to long term due to an anticipated decreasing demand of Sanofi-Aventis for those pens.
Optimization of the operational structure
Because Ypsomed can only partially compensate for this decline over the next 12 to 18 months through the production of components of the SoloStar® pen, and due to the fact that injection systems from newly won client projects are scheduled for launch in the years 2011 to 2013, Ypsomed will have to adapt its organizational and personnel structures as well as its production. Therefore Ypsomed decided to consolidate certain functions, to simplify the management structure, and to reduce the number of executive board members. In his function as Senior Vice President Marketing, Simon Michel will in addition assume responsibility for Sales formerly held by Dr. Jörg-Markus Paul who in turn will take on an executive role assignment within a leading German corporation. In the same manner Markus Geist formerly in charge of Technology will also assume a new challenge outside of Ypsomed. His duties and responsibilities will be taken on by Chief Operating Officer Maurice Meytre's department. Ypsomed would like to thank both colleagues for their valuable contributions and their great efforts on behalf of Ypsomed.
As announced earlier on, the business year 2009/10 is a build-up period for Ypsomed with high investments for the production ramp-up for pen needles and injection systems as well as with additional costs for the market launch of the blood glucose monitoring system Pura(TM) in Europe. The expected sales in 2009/10 therefore depend a great deal on the changed product mix for Sanofi-Aventis and on the success of the Pura(TM) launch. CEO Richard Fritschi explains: "Due to the lower than expected production volumes for Sanofi-Aventis and the gradually increasing revenues from Pura(TM) test strips, we are somewhat cautious and anticipate for the ongoing business year 2009/10 sales to decrease by around 6% compared to the last business year and a slightly improved EBIT margin rate compared to the first half year 2009/10." Ypsomed is planning to launch new diabetes products under the mylife(TM) diabetescare brand and to geographically expand the pen needle sales through the collaboration with new distributors. In addition, Ypsomed is working with new pharma and biotech companies on various projects in order to bring several innovative injection systems to the market in the years 2011 to 2013. Chairman Dr. h.c. Willy Michel therefore remains optimistic about the future: "Ypsomed is very well positioned in the growth markets of self-medication and diabetes care and will therefore grow sales by launching numerous new products and thereby improve its profitability in a sustainable manner." The guidance for the business year 2010/11 will be confirmed in spring 2010.
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